Agriculture & Food

Croatian agriculture is divided into three different geographical and climatic zones: the lowland zone in the north of the country, influenced by the continental
climate; the coastal zone in the south, influenced by the Mediterranean climate; and the mountainous zone that occupies the central part of Croatia.
Such diversity, in addition to a relatively low level of pollution, allows for the production of numerous agricultural products including farm and industrial crops,
vineyards, and continental and Mediterranean fruits and vegetables.

Croatia has a total of 3.15 million hectares (ha) of agricultural land out of which only 1.3 million ha is in use. Farms in Croatia can be characterised as being
relatively small: the average size of 5.6 hectares per holding in 2010 was considerably less than the average of 14.4 hectares per holding across the whole of
the EU-27.

Opportunities for Danish companies:

Exports of food, live animals and animal feed–no customs for Danish products (e.g. Croatia is a large pork importer. In 2012 pork imports reached EUR 125 million, mostly from the EU)

Indeed, about one half (52.5 %) of all holdings in Croatia were less than 2
hectares in size, with the vast majority (89.4 %) being less than 10 hectares in
size. On this basis, the ‘national herd’ of 1.0 million LSU in Croatia was
dominated by pigs (37.4 %), cattle (36.6 %) and poultry (14.8 %).
Not only can farms in Croatia be characterized as being small in terms of land area but also in terms of their livestock; on average, each holding that had
livestock in Croatia had just 5.3 LSU.

The country meets most of its food and drink needs through imports, which are on average cheaper than domestically produced goods. Croatia’s total imports
in this category vary around 1.15 billion. The situation has been worsened by rising competition from regional and EU players, the latter of which are particularly
prominent in terms of imports of cocoa, soybeans, oil crops, breeding cattle, milk, meat, fruit and vegetables. EU accession is generally a challenge for food and
drink producers of a new member state, which tend to struggle to meet the high level of industry standards. Agricultural experts estimate that more than third
of Croatia’s 150 000 farms may experience bankruptcy unless they merge and improve their standards. This is why the government has begun prioritising
such initiatives.

Substantial EU funds will be available to the state and Croatian farmers which will help improving the standards in production as well as rural development
in general.

Having successfully achieved EU membership, Croatia now needs to address the future development of its food and drink industries. The country’s producers
must increase their export focus while concentrating on building up their domestic share. Apart from a handful of major domestic players, local companies
cannot compete with foreign entrants and their products.

Despite ample natural resources and an environment that is conducive to farming, Croatia is failing to meet its domestic agricultural and food and
drink needs, a situation that is likely to continue in the short term at least.
Organic agriculture has a huge potential and may provide a small break from the situation, although levels of such activity are at the moment low and are
suffering from the lack of investment.

Croatia has a total of 3.15 million hectares (ha) of agricultural land out of which only 1.3 million ha
is in use. Farms in Croatia can be characterised as being relatively small:
the average size of 5.6 hectares per holding in 2010 was considerably less than the average
of 14.4 hectares per holding across the whole of the EU 27.

Aquaculture and fisheries

Opportunities for Danish companies:

Croatia is an excellent market for fish and seafood exports. Croatia’s
faltering fishing industry cannot meet rising demand for seafood as the
country becomes a more popular tourist destination. The small blue fish is
the most consumed fish on the national market, but due to changing
nutritional habits and consumer demand, salted fish production has
significantly increased, including anchovies, frozen fish, smoked fish
(smoked sea bass, salmon, eel, and freshwater fish), fish pâté, marinated
fish, and others.

Croatia’s fish processing industry and fish farming/breeding is also
expanding and consequently demands new equipment as well as more feed
for fish (e.g. tuna) and fish fry.

Aquaculture is playing important role in Croatian fisheries. Farming of aquatic
organisms in Republic of Croatia comprises marine aquaculture and farming
in fresh (inland) waters. Marine aquaculture includes farming of finfish, pelagic
fish and shellfish.

Total production reaches some 12.000 tons annually, with a total value of
some EUR 120 million. Finfish farming is dominated by sea bass and sea
bream. Farming of tuna is based on capture of smaller wild tunas (8-10 kg)
and their subsequent farming to the market size (30 kg and above). Farming
takes place in floating cages at sea.

Export of aquaculture products, especially farmed tuna, (total value EUR 32
million in 2010) holds the very high fifth place in total export of agricultural
products of Republic of Croatia. Members of the aquaculture cluster annually
produce more than 4.000 tons of tuna, 5.000 tons of white fish and 2.000
tons of shells and 15 million pieces of fingerlings. The full amount of tuna is
exported to the demanding market of Japan. Most of the white fish goes to
Italy and a smaller part of it and the total production of shellfish is sold in the
domestic market.

Although Croatia is a net-exporter of fish and seafood products, it imports a
significant quantity as well. Annually, Croatia imports over EUR 76 million in
fish and seafood. The demand for fresh-water fish and seafood is expected to
increase with modern changes in nutritional habits and increased demand
from tourism.

In 2013 there has been some noticeable investments in modernization of fish
processing plants improving the total output, quality and brand. Danish
processing equipment was installed in the new production facility of Sardina
d.d. (www.sardina.hr).